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Summary: A conditional offer is an agreement of purchase and sale (APS) that only becomes firm once stated conditions — financing, a home inspection, a status certificate review — are met within a set window, often five to ten business days. Miss the window and the deal can fall away.
Conditions are the main protection a buyer has after an offer is accepted. In a competitive market some buyers drop them to make an offer more attractive, so it helps to know what each condition does and how long you actually have before deciding which ones to keep.
What is a conditional offer in Ontario?
A conditional offer is an accepted agreement of purchase and sale that depends on one or more conditions being satisfied before it becomes binding. Until each condition is met or waived, the sale is not firm, and the buyer can usually walk away on those terms with the deposit returned.
That is the key difference between a firm offer and a conditional one.
Firm offer | Conditional offer | |
Binding on acceptance | Yes, immediately | Only once conditions are met or waived |
Buyer protection after acceptance | None | Can exit if a condition is not satisfied |
Typical setting | Competitive or bidding situations | Most standard purchases |
Deposit if the deal falls through | At risk | Generally returned if a condition fails |
What conditions do buyers usually include?
Most conditions exist to give the buyer time to confirm something important before committing. The common ones in Ontario are:
Financing. Time to confirm the lender will actually fund the mortgage on this property, not just a pre-approval.
Home inspection. Time to have the property inspected and review the report for major issues.
Status certificate review. For a condo, time for a lawyer to review the status certificate and the corporation's financial and legal health.
Sale of the buyer's existing home. Makes the purchase contingent on the buyer selling their current property first.
Lawyer review. Time for a lawyer to review the agreement, title, and related documents before the deal firms up.
How long do you have to satisfy a condition?
The conditional period is whatever the agreement says, commonly five to ten business days from acceptance, counted in business days unless the agreement states otherwise. Each condition can have its own deadline, and the clock starts the moment the offer is accepted.
Resale homes in Ontario have no statutory cooling-off period; the conditions you negotiate are the protection. The Real Estate Council of Ontario (RECO) is the provincial regulator for this. (A brand-new pre-construction condo is different: it carries a 10-day statutory rescission period under the Condominium Act, 1998.)
How does a condition get waived or fulfilled?
Within the conditional period, each condition resolves in one of three ways:
Waiver. The buyer gives up the protection of a condition they no longer need, in writing, and that condition is removed.
Notice of fulfillment. The buyer confirms in writing that the condition has been satisfied (for example, financing approved), and the condition is met.
Lapse and mutual release. If a condition is not waived or fulfilled by its deadline, the deal ends and the parties sign a mutual release so the deposit can be returned.
Once every condition is waived or fulfilled, the offer becomes firm and binding, and the transaction proceeds to closing.
Can you back out during the conditional period?
Yes, on the terms the condition allows. If a condition genuinely is not satisfied (financing falls through, the inspection turns up a serious problem, or the status certificate raises red flags), the buyer can typically end the deal and have the deposit returned, provided they follow the agreement's notice requirements.
After the conditions are waived and the offer is firm, that protection is gone. Walking away at that point can put the deposit at risk and expose the buyer to further claims, so the conditional period is the window to do your due diligence. A lawyer's review during that window is the cleanest way to confirm you are comfortable before the deal firms up. For the title side of that review, see what a title search covers.
Frequently asked questions
What does "conditional" mean on a house listing?
It usually means an offer has been accepted but is still subject to conditions, like financing or inspection, that have not yet been waived. The sale is not firm until those conditions are met, so the deal can still fall through.
How many business days is a typical financing condition?
Often five business days, though it varies by agreement and market. Weekends and statutory holidays are normally excluded when the agreement counts the period in business days.
Can a seller accept another offer during the conditional period?
Not on a signed conditional deal, but some agreements include an escape clause that lets a seller continue showing the property and ask the buyer to firm up or step aside if another offer comes in.
Do you get your deposit back if a condition isn't met?
Generally yes, if the condition genuinely was not satisfied and you followed the notice requirements in the agreement. The parties usually sign a mutual release to return the deposit.
Is a conditional offer binding?
It is a binding agreement to proceed if the conditions are met, but it does not firm up the sale until each condition is waived or fulfilled within its deadline.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law, helping buyers with purchase closings, refinances, and sales. Our licensed Ontario lawyers can review your agreement and title during the conditional period and guide you through to closing on a fully digital platform. You can start your closing online or get in touch with any questions.
Legal references: Condominium Act, 1998, S.O. 1998, c. 19 (status certificate and pre-construction rescission period).
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
